WSJ Survey: US Recession Risks Fade as Inflation Proves Persistent

Key Facts

Reflecting a shift in sentiment regarding the trajectory of the world's largest economy, economists surveyed by the Wall Street Journal have lowered the probability of a U.S. recession. According to the findings, analysts believe the economy has shown greater resilience than previously anticipated, though they cautioned that inflation is likely to remain persistent. The survey attributes this sticky inflation to the lingering effects of the conflict with Iran, which may complicate the Federal Reserve's path toward monetary easing.

These projections arrive as vital sector data shows notable divergence; the ISM Services PMI recently printed at 54 according to market data, signaling continued expansion in economic activity. In comparison to other major economies, the Eurozone reported a modest 0.2% monthly increase in retail sales, while German industrial production grew by 0.9%, reinforcing the narrative of U.S. economic outperformance relative to global peers per official economic data.

Investors should monitor upcoming communications for clearer signals on monetary policy, particularly scheduled speeches from Federal Reserve officials. Fed Governor Waller is set to speak on July 6, 2026, followed by Governor Bowman on July 7, 2026. These events will be critical for gauging whether the central bank will maintain higher rates for longer in response to the fading recession risks and structural price pressures mentioned in the survey.